So far this week the oil markets have been reacting to the news that Libya’s Zueitina port, in the east of the country, is ready to start receiving tankers again after the drawn out negotiations over access. This increase in global oil supply has been anticipated for some time, however numerous issues have meant that delays occurred. Oil output from the OPEC country has shrunk to only a sixth of the previous year’s 1.4 million barrels a day.
The situation in Ukraine is still brewing while the stability of the country is being strongly tested. The comments from the G7, regarding how and where they will next employ sanctions, have been taken well by the markets, as there appears to be a focused strategy of who and what is being targeted. The latest round of sanctions has seen the US add 17 companies to the list while it continues to squeeze Vladimir Putin.
The last six months saw Brent crude tugged one way and another as fears over supply have periodically sent the market higher, while cooling Asian demand has eased the price lower. Once again the price was pulled back to its core 50-, 100- and 200- day moving averages, with all three moving horizontally over the last couple of months.
For the time being, optimism over supply appears to be gaining the upper hand as the price migrates back into the middle ground.